Constellation Energy Corporation (NASDAQ:CEG) Q4 2022 Earnings Call Transcript

Joseph Dominguez: We’re always bound by confidentiality when we look at any group of assets or any companies so I’m not going to get into the specifics. What I would say is the same impact that has happened to our fleet and the value of our company is expressed in those acquisition values for M&A. But that’s where we get to kind of have to take a little bit more of a disciplined view of looking at the quality of the assets that are available, how well they have been maintained and this big criteria for us around dual unit sites as opposed to single unit sites. For our fleet, we’re invested in 23 units. 21 of them operate as a dual unit site or effectively as a dual unit site. The only 2 plants that are outliers are Clinton, right, and .

And in both those circumstances, the reason they’re part of our fleet is because the states have had clean energy policies that require the existence and continued operation of these plants. So that’s the way we’ve looked at it. We’ve run every single one of these assets out there. We know exactly what to look for in diligence and we’ve been disciplined. I’m not trying to signal to you that we think any less of the consolidation opportunity. That’s not my intent here. But I think when people heard us talk about discipline, they had a view that, that was something that we sold on and we’re not. We already have a tremendous business here, unparalleled by any other group of assets, and I’m not going to dilute it by overpaying for anything. If there are assets that come to us that are available at what we believe is a reasonable price and they meet the criteria we talked about, we’re going to go after it.

But it takes 2 hands to clap in this space. And I think the other reality is we probably aren’t seeing the same passion for separating these assets from traditionally regulated utilities that exist in pre-IRA and frankly throughout the separation of Exelon into its 2 component parts. So that’s what we’re seeing. I think there will still be opportunities, and we’ll kick the tire on everything. So I don’t want to indicate a lack of opportunity, but it’s the reality of our discipline and the reality, as I said, of the fact that these units are more valuable in the IRA setting, and strategically, companies are holding on to them.

Operator: And our next question comes from David Arcaro from Morgan Stanley.

David Arcaro: I’m just wondering just you’ve got $2 billion of additional capital that hasn’t yet been allocated. Wondering just what the milestones or timing you would envision in terms of identifying other investment opportunities to start to allocate that capital. Could more opportunities kind of pop up through 2023? Or is that potentially a chunk that could roll over into 2024 and serve as an ongoing base for a potential allocation?